Equations Flashcards
Earnings per share
net income - preferred dividends / average of common shares outstanding
working capital
current assets - current liabilities
current ratio
current assets / current liabilities
debt to assets ratio
total liabilities / total assets
Free cash flow
net cash provided by operating activities - capital expenditures - cash dividends.
Retained Earnings
Beginning retained earnings + net income - dividend
net income
revenues - expenses
interest
face value of note x annual interest rate x time in terms of one year (1/12)
How to figure gross profit in a merchandising company
gross profit = sales revenue - cost of good sold
Gross profit rate
gross profit / net sales. Expressed as percentage
Profit margin
net income / net sales.
inventory turnover ratio
cost of goods sold / average inventory
days of inventory (avg age of inventory)
365 / inventory turnover ratio
ending inventory under FIFO
ending inventory under LIFO + LIFO reserve
weighted average unit cost
cost of goods available for sale / total units available for sale
